The ruling Homeland Union–Lithuanian Christian Democrats are essentially against progressive taxes.
The Social Democratic Party of Lithuania proposes taxing monthly income under LTL 8,000 (EUR 2,302) with a 20-percent rate, and applying a 35-percent rate on income over the limit. Algirdas Butkevičius, the party leader, said that income up to LTL 1,200 should be taxed with a 5-percent rate. Butkevičius made the proposal at a live debate organized by BNS news agency and the Lietuvos Rytas TV on Sunday.
Viktor Uspaskich, leader of the Labor Party, said during the debate that his party would be in favor of not increasing the income tax for higher earners but in favor of reducing it for lower earners. It would allow increasing the subsistence level for poorer residents, Uspaskich said.
Neringa Venckienė, chairwoman of the political party Path of Courage, said the party backs higher taxes for annual work-related income of over LTL 120,000 and dividends. Asked what the higher rate could be, Venckienė said "around 15 percent". Currently all work-related income is taxed at 15 percent.
Valentinas Mazuronis, who represented the Order and Justice Party during the debate, said his party proposed applying a higher tax rate on monthly income exceeding LTL 3,500. Moreover, progressive tax rates should be applied not only to wages but also to interests, dividends, and income from individual activity. The Order and Justice Party also suggests cutting the income tax for the lowest earners.
Eligijus Masiulis, leader of the Liberal Movement which is against progressive taxes, said progressive taxes promote shadow economy, put qualified workforce off, and, Masiulis said, there's a very small number of people capable of paying higher taxes in Lithuania.
"Only 5 percent of Lithuanian people earn over LTL 5,000 per month," Masiulis said.
Prime Minister Andrius Kubilius, chairman of the Homeland Union–Lithuanian Christian Democrats, has said income taxes in Lithuania are already progressive as there is the nontaxable minimum. In Kubilius' words, the Homeland Union–Lithuanian Christian Democrats would back further increasing the nontaxable minimum until it reaches the minimum monthly wage, currently LTL 850. But, he added, it should be done by also introducing a universal real estate tax.
The Seimas elections are scheduled for 14 October.
